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Equities

India shares rise to one-month high as Vedanta, Hindalco advance

Easing U.S.-China trade tensions buoy industrial commodity producers

MUMBAI (NewsRise) -- Indian shares rose to a one-month high on Wednesday as gains in industrial commodity producers and energy explorers offset concerns over rising crude oil prices.

The BSE Sensex rose 0.2% to 33,940.44 and the Nifty 50 Index climbed to 0.1% to 10,417.15. Miner Vedanta advanced 4.3%, aluminum and copper producer Hindalco Industries added 1.7%, and Tata Steel closed 1% higher as easing U.S.-China trade tensions buoyed prospects of commodity producers.

Oil explorers rose while fuel retailers declined as Brent crude prices reached their highest level in more than three years. Oil & Natural Gas Corp. and Oil India rose by at least 0.9% each, while Hindustan Petroleum, Bharat Petroleum, and Indian Oil Corp. slumped 6.4% or more.

The overnight jump in crude prices to their highest since December 2014 raised concerns about inflation accelerating in India, pulling the benchmark indexes lower earlier in day. With India importing a substantial portion of its crude oil requirements, an increase in international prices sparks fears of a rise in inflation expectations.

The Indian rupee dropped to its lowest level in three weeks against the dollar and 10-year bond yields climbed 10 basis points.

"Crude oil prices are moving higher and bond yields are climbing. With the Nifty 50 having recently rallied from 10,000 to current levels, the odds are in favor of markets correcting to 10,200 levels in coming days," said A.K. Prabhakar, he of research at IDBI Capital.

Globally, the cues continued to be positive with U.S. indexes climbing 1.7% and most regional equity markets closing higher on Wednesday as U.S.-China trade worries receded further. The two nations moved further away from their combative stance with President Donald Trump applauding Beijing's efforts in reducing tariffs and China's central bank spelling out timelines for opening up certain sectors of the economy.

Punjab National Bank fell 3% after Fitch Ratings downgraded the viability rating of the state-run lender following the revelation of a near $2 billion fraud involving a diamond trader.

Reliance Industries advanced 1.4%. CLSA retained its 'buy' rating on the stock, saying the yet-to- be-launched broadband business could add $5 billion to its valuation.

Larsen & Toubro fell 0.3%. Nomura maintained its 'buy' rating on the stock, saying the company remained its top pick in India's Industrial space.

The Phoenix Mills advanced 1.6% after Canada Pension Plan Investment Board invested 9.38 billion rupees ($144 million) to acquire 19% shares in the real-estate developer's subsidiary Island Star Mall Developers.

Himachal Futuristic Communications advanced 4.3% after it received an order worth 5.79 billion rupees from state-run Bharat Sanchar Nigam.

-- Nimesh Vora and Vidyut Deshpande

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